Urban Regeneration in the Post-Socialist Context: Budapest and the Search for a Social Dimension

Abstract

Based on a case study of Budapest, the authors discuss how regeneration strategies are being negotiated within post-socialist transformation contexts. Post-socialist transformation is in many ways a pronounced case of globalization and accommodation to market-driven logics of urban development. The example of regeneration strategies in Budapest highlights many of the contradictions involved in realizing socially sustainable and integrated regeneration strategies in post-socialist countries. Weak levels of state intervention, institutional fragmentation and powerful market incentives to promote speculative redevelopment tend to hinder the emergence of an affective social dimension. At the same time, the case studies presented here also provide evidence for incremental processes of learning that reflect local socio-spatial realities as well as “grander” designs of urban regeneration. This essay thus addresses processes of experimentation that are taking place in Budapest within a tense political space characterized by market-driven redevelopment, administrative fragmentation, autocratic governing styles and new multiactor approaches—partly funded by the European Union—to socially inclusive regeneration.

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Urban Regeneration in the Post-
Socialist Context: Budapest and the
Search for a Social Dimension
Krisztina Keresztély a b & James W. Scott c
a ACT Consultants, Paris, France
b MTA VITA Foundation, Budapest, Hungary
c Karelian Institute, University of Eastern Finland, Joensuu,
Finland
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Socialist Context: Budapest and the Search for a Social Dimension, European Planning Studies,
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Urban Regeneration in the Post-Socialist
Context: Budapest and the Search for a
Social Dimension
KRISZTINA KERESZTE
´LY∗
,
∗∗ & JAMES W. SCOTT
†
∗ACT Consultants, Paris, France, ∗∗MTA VITA Foundation, Budapest, Hungary,
†
Karelian Institute,
University of Eastern Finland, Joensuu, Finland
(Received June 2010; accepted September 2011)
ABSTRACT Based on a case study of Budapest, the authors discuss how regeneration strategies are
being negotiated within post-socialist transformation contexts. Post-socialist transformation is in
many ways a pronounced case of globalization and accommodation to market-driven logics of
urban development. The example of regeneration strategies in Budapest highlights many of the
contradictions involved in realizing socially sustainable and integrated regeneration strategies in
post-socialist countries. Weak levels of state intervention, institutional fragmentation and
powerful market incentives to promote speculative redevelopment tend to hinder the emergence of
an affective social dimension. At the same time, the case studies presented here also provide
evidence for incremental processes of learning that reflect local socio-spatial realities as well as
“grander” designs of urban regeneration. This essay thus addresses processes of experimentation
that are taking place in Budapest within a tense political space characterized by market-driven
redevelopment, administrative fragmentation, autocratic governing styles and new multiactor
approaches—partly funded by the European Union—to socially inclusive regeneration.
Introduction
Urban planning and policies of urban regeneration have been profoundly affected by shifts
in state-society paradigms. These shifts suggest that new forms of politically relevant
action can (or must) increasingly take place “beyond the state” and beyond the seemingly
inflexible territoriality of the state. The “new” at stake here is a notion of governance based
on spatial relationships within given territories rather than on administrative and/or lega-
listic frameworks (see Albechts et al., 2003). Different but often interrelated policy
agendas have proven difficult to integrate because of compartmentalized policy delivery,
the exclusion of many relevant stakeholders and jurisdictional fragmentation. With new
Correspondence Address: Krisztina Kereszte
´ly, ACT Consultants, Paris, France; MTA VITA Foundation,
Budapest, Hungary. Email: kerkrisz@lunart.hu
European Planning Studies, 2012, 1 – 24, iFirst article
ISSN 0965-4313 Print/ISSN 1469-5944 Online/12/070001– 24 #2012 Taylor & Francis
http://dx.doi.org/10.1080/09654313.2012.674346
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concepts of urban development and regeneration, the jurisdictional matrix is enriched
through networks that bring together local governments, state agencies, economic
actors, citizens’ groups and other stakeholders—in theory, at least.
The context of post-socialist transformation highlights many of the contradictions as well
as the development potentials of urban regeneration policies. Post-socialism can be under-
stood as a socio-political context of transformation in which new rules and identities form
under circumstances of uncertainty and enormous fiscal restraints (Hamilton et al.,
2005).This also involves a nonlinear transition between systemic orders that is characterized
by relative instability but also experimentation (see Kostecki et al., 2000). Problem-solving
structures that have existed for decades are now being delegitimized and recast. There are,
furthermore, no predetermined paths to new forms of governance and policy development.
Similarly, urban planning in European post-socialist countries has been greatly influenced
by a slow and often painful transition from protected and highly directed economies to
systems based on competition, international trade and free markets. At the same time,
local governments in Central and Eastern Europe have acquired wider administrative
responsibilities and a new political importance due to decentralization.
The consequences of these processes for urban governance are evident. In remarkable
contrast to the expectations of modernization theory proponents (see Przeworski, 1991,
2000), this transformation has acquired a logic of its own, shaped by adverse, if not antag-
onistic, interests. This fact has been mirrored by a marked political fragmentation, both in
administrative and ideological terms. Accordingly, the coordination of urban policies in
cities such as Gdansk, Warsaw, Budapest and Bratislava, has been clearly restricted by
the re-establishment of local autonomy (with district councils pitted against the city gov-
ernment as well as against each other) (see Sykora, 1999; Kereszte
´ly, 2002; Kereszte
´ly &
Enyedi, 2003; Tocsis, 2005). Furthermore, power struggles between “liberals”, “national
conservatives” and more left-leaning groups often make progress in urban policy areas
such as transportation, social welfare, housing, regeneration/redevelopment, the improve-
ment of public spaces and the urban environment very difficult (Djordjevic, 2006). What
might be called “neoliberal” policies have held sway—partly because of the ideological
vacuum left by the demise of state socialism but also due to a process of both voluntary
and involuntary adaptation of “western” ideas (Stenning et al., 2010).
By the same token, systemic change has created new frameworks for urban planning and
governance. Having re-emerged as political actors, cities in Central and Eastern Europe
(CEE) have again become a locus (albeit a contested one) of citizenship and participation.
Furthermore, accession to and membership in the European Union have opened up new per-
spectives for urban policy, including citizen participation in initiatives targeted at the urban
environment, strategic planning and social issues (Kondor & Horva
´th, 2008; Kova
´cs, 2008).
The case of Budapest indicates that participation processes have very often been restricted
to strategic documents or only superficially encouraged, thus reducing the impacts of
bottom-up governance on urban development. And yet, there is reason to believe (or at
least hope) that new actors are emerging in urban contexts who are able to articulate
group interests, including the interests of groups negatively impacted by transformation pro-
cesses. With this essay we hope to shed light on how regeneration strategies are being nego-
tiated within post-socialist transformation contexts. This, generally speaking, has very much
to do with weak levels of state intervention, institutional fragmentation and powerful market
incentives to promote speculative redevelopment. The focus will be on Budapest and its
inner city neighbourhoods. Little research exists on the governance forms that are emerging
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in CEE cities and, furthermore, little is known about emerging local solutions to urban pro-
blems (see Hardy, 2004; Stenning, 2005; Stenning et al., 2010). Furthermore, concepts of
urban governance developed in West European contexts may be (at least) partially
inadequate to account for the basic functions and logics of urban development strategies
emerging in countries such as Poland, Hungary, Slovakia and the former East Germany.
Budapest’s regeneration experiences are a reflection of the structural, institutional and
cultural discontinuities of post-socialist transformation as well as of the increasing influ-
ence of the European Union. Accordingly, Budapest’s inner city neighbourhoods have
been the sites of rapid change and attempts to forge a local social agenda of urban regen-
eration, with partial success. With this discussion, we present evidence for the emergence
of experimental and incremental urban regeneration practices that reflect political tensions
characterized by market-driven redevelopment, administrative fragmentation, autocratic
governing styles and new multiactor approaches—partly funded by the European
Union—to socially inclusive regeneration. The essay begins with a rather detailed contex-
tual discussion of post-socialist urban governance and the specific situation in Hungary in
order to properly frame the regeneration practices that have emerged in Budapest’s inner
city neighbourhoods. The case studies themselves focus on attempts to reconcile massive
investment in the urban fabric with goals of social inclusion and citizen involvement in
neighbourhood development.
Urban Regeneration and Post-Socialist Transformation: A Profound Governance
Challenge
Cities are home to change based on innovation, entrepreneurial spirit and economic
growth. Urban growth or urban innovation strategy should be pursued strengthening
the relations between the business sector, the research institutions and the public
sector and promoting at the same time an attractive urban environment ... Economic
growth is sustainable when it is accompanied by measures designed to reduce
poverty, social exclusion and environmental problems. The question of the sustain-
able character of growth is particularly important in cities most exposed to problems
of social exclusion, deterioration of the environment, wastelands and urban sprawl.
(Commission of the European Communities, 2006, p. 4)
Since the disappearance of the Iron Curtain, the cities of Central and Eastern Europe have
been integrated into the international urban hierarchy (Enyedi, 1998). The privatization
and the restructuring of former state industries, the arrival of international firms, banks
and high-level services etc. have fundamentally transformed urban landscapes. Cities
such as Warsaw, Prague, Budapest and Bratislava—“reinvented capitals” according to
de Vet (2010)—have been literally flooded with new urban developments: office build-
ings, shopping centres, industrial and technological parks, (luxurious) residential com-
plexes and buildings. New urban centres and functional zones have emerged as a result
of economic transformation, entailing the enlargement of the city-centre and the regener-
ation of some former industrial zones as venues of high-level tertiary activities. The latter
are located at strategic points in the capital, along the main roads leading to the most
important motorways or by the riverside.
The new prosperity of Central European cities hides, however, uneven urban develop-
ment and a number of urgent problems. The spectacular international development of
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major cities in Central Europe has led to their spatial restructuring, with the revitalization
of some neighbourhoods that occupy “strategic” positions and the accelerated degradation
of many other areas. Degradation concerns first and foremost the historical centre, obsolete
industrial areas (i.e. brownfield sites) and most housing estates built during the socialist
period. The degradation of these areas has been a compounded result of decades-long
neglect and a lack of public intervention during the socialist as well as the post-socialist
period. Contrary to “winner” neighbourhoods, these areas have benefited neither from
high-level tertiary and residential development nor from international investments.
They suffer disproportionately from the fact that, since 1989, only a small middle class
has emerged that has proved unable to muster the economic resources required for local
regeneration. Likewise, no stable local small and medium enterprises (SME) have
emerged that might sustain such regeneration.
Urban regeneration issues have often been affected by negative demographic trends, sub-
urbanization and gentrification. In the case of Budapest, the population has diminished in the
central city and in the country as a whole, with the exception, however, of settlements sur-
rounding Budapest (Daro
´czy, 1999). Between 1990 and 1999, Budapest lost 9.7% of its
population, while the number of inhabitants in the 78 surrounding settlements increased
by 8.8%. Over the same period, the population of the country decreased by 2.3%. Suburba-
nization was further encouraged by its strong economic development. Substantial invest-
ment in retail and logistic centres were realized in the agglomeration and often outside of
Budapest due to the availability of large greenfield sites (Barta, 1999). By the 1990s, an
unbroken economic and residential agglomeration zone had formed around the capital.
Since 2000, the gentrification of Budapest’s inner historical districts has accelerated as a
result of the spontaneous movement of mostly young people towards the urban core.
Gentrification is also a consequence of renewal programmes that have attracted a wealthier
population (Csanadi et al., 2006; Kereszte
´ly, 2008). As a result, Budapest’s population has
recently increased somewhat, reaching 1.7 million persons in 2009. Although a growing
number of people are moving back to the city, sustainable development of inner city neighbour-
hoods remains uncertain, partly because of the lack of amenities for young families. Despite
prestigious regeneration projects launched in the inner city, many basic urban services, such
as kindergartens, schools, parks etc, have not been improved in a commensurate manner.
Inner city “slum” areas are the most visible manifestation of the withdrawal of the
central state (and of the public sector in general) from housing and urban development.
Furthermore, the physical decline of many central areas of Budapest persists due to a
lack of effective urban renewal policies. Urban renewal does not rank highly in the politi-
cal decision-making agenda and in terms of funds allocation. A high percentage of local
government expenditures are used to cover running costs and a very low level of funding
has been available for new investments and renewal project. Strategic interventions, such
as those envisaged within the scope of comprehensive urban regeneration are urgently
required in order to improve the lot of these disadvantaged areas and to re-integrate
them into the economic and social fabric of the city.
Post-Socialist Planning Contexts: Growth Imperatives versus Integrated Approaches to
Urban Regeneration
Urban regeneration has become an important and complex political arena within the
European Union. This is evidenced by such community initiatives as URBAN which
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have promoted the notion of integrated approaches to urban problems through a cross-
sectoral coordination of actions, strong horizontal partnerships, increased local responsi-
bilities and the concentration of funding on selected target areas (Commission of the Euro-
pean Communities, 2008, p. 3). Reflecting the growing impact of collaborative and
discursive turns in urban planning, European concepts of regeneration have also broken
down strict divisions between physical renewal, social equity and inclusion, economic
opportunity and environmental sustainability as urban development issues (see Healey,
2007). What is emerging is a planning paradigm that promotes a holistic approach to
urban development and the solution of urban problems. It is also a governance paradigm
that supports public participation, public– private partnerships, urban-regional co-oper-
ation, policy integration as well as long-term strategic perspectives. Through processes
of “political socialization” (see Filtenborg et al., 2002) and concrete incentives provided
by the EU, national agencies and the “third sector”, the regeneration paradigm is now
firmly entrenched in planning discourses within Europe, even though its commensurate
implementation has lagged somewhat (see Couch et al., 2003).
Similarly, urban policy in the post-socialist states of Central and Eastern Europe has
been increasingly influenced by planning discourses propagated by the European Union
and by domestic pressures for political change. “Europeanization” (see Hamedinger
et al., 2008) has made a major policy impact here as well and virtually all post-socialist
democracies—most of which are now members of the EU—have attempted to adopt
aspects of strategic urban regeneration.
1
This also entails developing new systems of
policy development and implementation that, on the one hand, connect state agencies,
local governments, local voluntary and community groups and, on the other hand,
provide a stronger local platform for negotiation and collaboration with the private sector.
Post-socialist transformation involves attempts to structure a new sense of coherence
within shifting political and economic contexts—it therefore requires the development
of new formal and informal institutions that facilitate the governance practices alluded
to above (see Potter et al., 1997; Wollmann & Lankina, 2003; Hardy, 2004). The challenge
for national, regional and local levels of government lies in their capacity to adapt, among
other things, to systems of European multilevel governance within environments of rapid
change (Horva
´th, 1999; Agh, 2002; Keating & Hughes, 2003). Whereas conditions of
democratic and systemic stability generally allow for critical (albeit often conflictual)
interaction between formal institutions (top-down) and counter-institutions (bottom-up),
systemic transformation generates a lack of clarity with regard to the role of civil
society “counter-action” and political participation (Lewis, 1997). Instead, there is a
lack of synchronicity between changes in formal institutions at the level of policy-
making and the persistence of older informal institutions (rules of actions, beliefs etc.)
at the level of everyday culture (Tatur, 2004). In addition, the search for new policy mech-
anisms is often accompanied (ironically) by an extreme politicization of policy issues,
social fragmentation as well as ideological polarization (Nagy, 2005; Stenning, 2005).
Sagan (2009) has sought to explain the governance challenges facing post-socialist
cities by re-employing the urban regimes theory developed and used in North American
and West European contexts.
2
Regimes are relatively stable constellations of different
elites who mediate between different levels of political power and establish largely infor-
mal conditions for action (e.g. in the area of urban development) at the local level. In terms
of their ideological and strategic orientations, urban regimes can vary from social welfare
to extremely market-oriented formations. Post-socialist cities have undergone a series of
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changes to their external, state-dominated socio-political environments that have radically
transformed the basic conditions for local regime formation. In general terms, urban
regimes in post-socialist countries are characterized by a shift to neoliberal policies and
a greater participation of the private sector but without a commensurate involvement of
the citizenry or civil society actors. In contrast to “Western” cases, this shift is less due
to genuine political beliefs than to the attempt of old/new elites to legitimize and conso-
lidate power by appropriating new (i.e. “western”) governance notions. As Sagan and
Grabkowska (2012) indicates, emerging post-socialist urban regimes are mostly “instru-
mental” in nature; they pursue short-term goals of urban growth focused on specific devel-
opment projects that provide tangible results. One reason for this is that local authorities
are financially dependent on new investment, entrepreneurship and, to an increasing
degree, on public– private partnerships in regenerating their cities.
Coalitions of power have been reshuffled and have assigned new functions to local
actors, embedding them within new institutional configurations. These changes have mate-
rialized in conditions that have been shaped by many years of state-socialist experience
and a system that developed its own specific forms of social stratification and economic
structures. What is more, and with the notable exception of the former East Germany,
social and economic relations have not been subject to rapid social revolution but are
being gradually redefined and reshaped. In this way, the former socialist hierarchy and
the privileges of certain social strata within this hierarchy have maintained great influence
on processes of re-establishing or bestowing decision-making power over urban develop-
ment (see Kulcsa
´r & Domokos, 2005).
The Budapest Planning Context: Fragmented Multilevel Governance?
Under socialism, the central state was in effect the sole initiator of urban development. The
end of the monopolistic position of central governments in this regard has generated new
forms of public intervention that strengthen the role of different types of public – private
co-operation. Transformation has also been characterized by the re-establishment of
local democracy and its administrative organs as well as by the complete legalization of
private ownership. At the same time, however, emerging democratic governance mechan-
isms have often reflected the lack of economic, political and social stability that has
characterized transformation. In Hungary, Poland and other central European countries,
basic democratic reforms (administrative reform, privatization, etc.) have resulted in a
fragmented institutional structure. Considerable economic and political authority was
transferred to local decision-making bodies and to the private sector. Ironically, this ten-
dency has reinforced the political power of new (often the same as old) political elites and
business interests. The lack of central subsidies and a national housing policy has only
occasionally been counterbalanced, and then rather imperfectly, by initiatives (such as
public– private partnerships) organized at the very local level of district municipalities.
Decentralization and property transfers have also deeply transformed the conditions of
urban planning. The transfer of the housing stock from the central state towards the local
governments had another important consequence for the development of Central European
cities: central government has disengaged itself from the field of public housing policy for
almost two decades. Local governments have but few possibilities to acquire public rev-
enues for rehabilitation and construction; they too have thus completely withdrawn from
the management and financing of public housing. For example, in 1994 the Municipality
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of Budapest created a housing rehabilitation fund, but could only allocate very limited
financial resources for this purpose.
As a result of the creation of autonomous local governments, planning became the joint
responsibility of cities and their district councils. Also, methods of planning have mark-
edly changed. Formerly, simple land-use master plans were prepared that set out
precise conditions for the further development of the capital. In the 1990s, these were
replaced by strategic urban planning. In the case of Budapest, Warsaw, Bratislava and
other cities, it is the Municipality that prepares structural development concepts while
the districts define detailed land used plans. Thus, the latter are responsible for the allo-
cation of construction permits, which gives the districts considerable discretion in urban
development issues. In practice—and the experiences of Warsaw, Bratislava, Prague
and Budapest confirm this—detailed plans necessary for granting construction permits
have been often prepared at the district level without the benefit of citywide comprehen-
sive strategic concepts. This has indeed been a necessity as central municipal governments
have been slow to act while districts have had to respond quickly to the demands of new
investors. With regard to urban planning: it seems that political transition did not only lead
to the complete withdrawal of the central state, but, as a result of the fragmented structure
of local authorities, resulted in the weakening of the entire urban planning process.
In general terms, we argue that the post-socialist period has favoured highly piecemeal
adaptations to exogenous forces of institutional change that have produced place-specific
logics of urban development. The urban policy process is highly fragmented in adminis-
trative terms and, at the same time, increasingly influenced by the conditionality of the EU
acquis communautaire and its structural funds (Kova
´cs Pa
´lne
´, 2009). Yet, modes of gov-
ernance are only gradually shifting in a commensurate manner as many of the former elite
have remained in power and top-down, autocratic decision-making structures remain
in place (see Sagan & Grabkowska, 2012). This is most clearly evidenced by the yet
limited role of civil society and neighbourhood organizations in urban regeneration pol-
icies. Major decisions affecting Budapest’s, urban fabric, regardless of the level where
they are made, have generally excluded serious public debate.
Housing Privatization and its Consequences
Another important aspect in the establishment of “local democracy” was the devolution of
fiscal assets to municipalities. Before 1989, all urban lands, infrastructures and other real
estate properties were owned by the state, and local councils had only the right of use. The
transfer of these goods from the central government to municipalities in 1990 was essential
to ensure the economic and political autonomy of local governments. In the case of Buda-
pest, district councils received all of the public housing stock—in effect, 52% of all
housing in the city, including that of the most disadvantaged neighbourhoods. The
newly acquired properties served as a fiscal basis for municipalities which promptly
launched privatization processes. However, the conditions of privatization prescribed by
law defined sale prices for flats well below market value. In a pattern repeated in many
cities of Central Europe, tenants could buy their flats for a relatively low price and sell
it afterwards for a price often 10 times higher (Bodna
´r, 1996). While privatization of
housing permitted local governments to obtain extra revenues, at least during the begin-
ning of the 1990s, it was also a solution for them to transfer in the long run, the general
moral and financial responsibilities of building maintenance (that they had obtained
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from the central state as an obligatory task related to the housing stock) towards the newly
established condominiums. In the buildings where privatization took place, local govern-
ments remain only small stakeholders of the condominium through a limited number of
flats that remain in their possession as part of their social housing stock.
The privatizations also signalled a retreat of the state from the area of urban policy and
planning. Furthermore, since 1990, levels of state subsidies have been established accord-
ing to quotas defined on the basis of the operating costs of municipal institutions. While the
transfer of property increased the economic autonomy of municipalities, a general
decrease in central government subsidies allocated to local governments took place.
State subsidies therefore do not suffice to compensate the total of functional expenditures
borne by the municipalities. The latter are therefore obliged to cover the remaining share
by their own income, from local taxes, returns from the privatization of transferred prop-
erties (for instance, housing stock) and new investment. Indeed, business taxes have
become one of the most important elements of local government finances. Furthermore,
available state subsidies mostly encourage the construction of new housing. Cities are
therefore obliged to seek public – private partnerships in order to finance housing construc-
tion undertaken on public land. Increases in local revenue in Budapest have been largely
attributable to the sale of shares and other properties in conjunction with a strong increase
of income related to easier credit-policies.
The Case of Budapest: Experimental Processes of Urban Regeneration
In the concrete case of Budapest’s urban governance, tensions are evident between tech-
nocratic traditions and less than transparent decision-making on the one hand, and new
multiactor and civil society initiatives aimed at sustainability, social inclusion and neigh-
bourhood improvement on the other. These tensions are particularly evident in urban
regeneration processes currently underway in the city and emerge from a basic “post-
socialist” condition of institutional flux. Thus, as the above discussion makes clear,
processes of fragmentation and autocratic governance practices coupled with neoliberal
policies that rely strongly on market forces, are primary conditioning factors of urban
development in Hungary. Political and economic transitions in the 1990s have resulted
in new forms of segregation and the withdrawal of the state from housing, social and
urban policies has contributed to processes of social exclusion. Partly as a result of this,
the concept of regeneration as a holistic and integrated approach to urban development
has only slowly made its way into Hungary’s policy repertoire. The more common
notion of “va
´rosrehabilita
´cio
´” (roughly translatable as “urban renewal”) is a complex
concept mostly used for physical renewal. Cultural or other non-material aspects of
renewal are not as yet fully conceptualized, and the notion of social renewal (“szocia
´lis
va
´rosrehabilita
´cio
´”) is of very recent date. In addition, “va
´rosrehabilita
´cio
´” makes few dis-
tinctions between different types of urban renewal programmes and the same term is used
for very different types of urban interventions. For example, entirely private real estate
investments in former industrial areas (Budapest’s XIII district), the demolition of build-
ings in historical districts and the construction of new ones, and the more comprehensive
programmes aiming at the regeneration of entire neighbourhoods (such as in Budapest’s
IXth District) are all considered as “urban renewal”. In addition, the meanings of
“renewal” and “gentrification” are sometimes confused. The latter is considered a positive
phenomenon reflecting the “modernization” of deprived urban areas while its negative
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connotation (i.e. as a process of socio-economic exclusion, discrimination and segre-
gation) has only recently been taken into consideration.
The focus of inner-city regeneration in Budapest is on neighbourhoods that have been
marginalized by the city’s rapid growth in financial and real state investment (see Keresz-
te
´ly, 2002, 2008). While parts of Budapest’s core have comprehensively transformed into
new business districts, retailing centres and attractive residential areas, a large share of
the older housing stock has experienced stark disinvestment. New housing construction
boomed after 2000, as low-interest mortgages and new urban development projects
(Corvin– Szigony) attracted investment (Kova
´cs, 2006; Hegedu
¨s & Teller, 2007). Processes
of gentrification and concerted processes of filtering-down thus accelerated. Furthermore,
suburbanization of middle-class families continues apace while older and poorer groups
have remained in the inner city (Csana
´di et al., 2007). The privatization of housing, follow-
ing the transfer of public housing to local municipalities, has resulted in an extremely frag-
mented ownership structure that makes it difficult to assemble properties for larger scale
renewal projects. Furthermore, while condominiums could play a central role in processes
of sustainable upgrading, they lack the necessary tools and financial capacity to engage in
more comprehensive projects of neighbourhood regeneration.
What follows in this essay is a discussion of regeneration initiatives that have been rea-
lized in some of Budapest’s most distressed inner-city neighbourhoods (Figure 1). Fre-
quent reference is made to the VIII., IX. and X. Districts where most of these activities
have taken place. As Table 1 shows, there are stark differences in the characteristics of
older populations and those of “newcomers” indicating that potential tendencies of gentri-
fication (an influx of young educated singles and families) and social segregation exist side
Figure 1. Map of Budapest indicated relative locations of inner city districts.
Source: Wikipedia (open source).
Urban Regeneration in the Post-Socialist Context 9
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by side. The most telling indicator of this is the marked increase in flat sharing induced by
increasing levels of poverty among the young.
Urban Renewal in Budapest: Humble Beginnings
Urban renewal of central districts appeared as a political aim only in the 1980s, during the
last years of the socialist regime. Some areas were designated and rehabilitated in the VIIth
district and a more complex rehabilitation plan was prepared for the IXth district (central
Ferencva
´ros). These were the first examples of urban renewal that, instead of demolishing
dilapidated structures and replacing them with prefabricated ones, focused on rehabilitating
the existing housing stock. Following the change of political regime, urban renewal again
almost entirely disappeared from urban policy agendas. The privatization of housing
made the process extremely difficult, as it deprived municipalities of a key tool in terms
of renewal, namely property ownership. Only one rehabilitation programme was launched
during the first years of the 1990s, that of central Ferencva
´ros. Based on previous plans,
the neighbourhood had already been designated as an area for urban rehabilitation that pro-
vided grounds for the local government to obtain exemptions from the obligation of priva-
tizing dwellings. By keeping all local housing in public ownership the municipality could
launch the project by creating a public– private development company following the
French model of the SEM (socie
´te
´de e
´conomie mixte), in partnership with the French
Caisse des De
´po
ˆts et Consignations. Through this public–private institution, the municipal-
ity was able to channel further local, national and foreign sources of support.
(1) based on the Bere
´nyi and Szabo
´(2009) study on housing preferences in central
Budapest.
Table 1. Shifts in Socio-demographic characteristics of inner-city neighbourhoods:
Persons residing before 1989 and newcomers moving in since 2000
a
VI. District
Inner
Tere
´zva
´ros
VIII. District
Inner
Jo
´zsefva
´ros
VIII. District
Magdolna
quarter
IX. District
Inner
Ferencva
´ros
–1989 2000– –1989 2000– –1989 2000– –1989 2000–
Single-person
households
40.3 21.7 30.9 21.3 30.2 15.5 34.4 21.6
Families with
children
14.9 23.9 14.6 34.1 15.1 38.0 21.3 21.6
More-generation
households
17.9 0.0 16.4 6.4 24.5 8.5 16.4 2.7
Flat-sharing
communities
1.5 23.9 3.6 12.8 0.0 1.4 1.6 16,2
Young people
(below 35 years)
7.5 73.9 16.4 61.7 9.4 47.8 8,2 60.4
Elderly (above 60
years)
67.2 6.5 54.5 8.5 50.9 11.6 59.0 2.9
Primary education
or less
6.0 6.5 18.1 6.4 29.3 31.0 26.2 2.7
Higher education
degree
53.7 56.5 30.9 46.8 9.4 23.9 41.0 56.8
a
Based on the Bere
´nyi and Sza
´bo
´(2009) study on housing preferences in central Budapest.
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Since 1997: Urban Renewal Through Public – Private-Partnerships
The first strategic document, “the Urban Rehabilitation Programme of Budapest”, was pre-
pared and adopted by the Budapest Municipality in 1997. The objective of this programme
was to “help neighbourhoods to maintain and improve their urban values in order to
develop their economic potentials and to fulfil their urban functions within the city”. In
the same year, the Fund for Urban Renewal of the Budapest Municipality (established
in 1994) was extended in order to finance projects within the framework of the pro-
gramme. During this period, urban renewal was limited to the physical renovation of
buildings and neighbourhoods. The majority of resources were allocated to the IXth
district and to a lesser extent to the other inner city areas (Vth, VIth and VIIIth districts).
At the beginning of 2003, the Budapest Municipality adopted its Urban Development
Strategy (Budapest Va
´rosfejleszte
´si Koncepcio
´ja). The strategy incorporated principles
of the programme on urban renewal and it was the first official strategic document
produced by the city government to clearly integrate the idea of sustainable urban and
social development.
It should be emphasized that public sector actors in Budapest have limited resources
with which to initiate processes of urban renewal. Following the dissolution of state
housing companies, municipal property management companies were established in all
districts, either as part of local government or as private law entities. Apart from
private investment, the Budapest Municipality manages the main public sector financial
instrument for urban renewal, the Rehabilitation Fund. This fund was established in
1994 and has two main sources of revenue: 50% of which comes from the city’s budget
and 50% from proceeds of privatization. Theoretically all districts are obliged to disburse
50% of their privatization revenues into the fund. However, in practice only a few districts
have fulfilled this requirement and the fund has therefore only supported a limited number
of projects (largely in the IXth district). In addition to subsidies for municipal renewal pro-
jects, the fund also gives direct financing for the renovation of condominiums. As priva-
tization winds down and proceeds dwindle, the Fund’s role will decrease markedly as well.
Partly out of a lack of resources but also as a result of municipal government collusion
with investors—public – private partnerships have emerged, since the early 1990s as the
principal movers of urban renewal, not only in Hungary but in Central East Europe as a
whole. In Budapest, several different types of PPP have been employed, ranging from
the creation of mixed enterprises, the selling of land to private investors for specific devel-
opment projects and co-operation with private investors who provide advance funding for
large prestigious projects (Palace of Arts). While such partnerships have been effective in
mobilizing resources and facilitating the implementation of major projects, their draw-
backs are clear: interests of investors and developers are privileged at the expense of
local residents and there is little communication with the community stakeholders. In
addition, the role of organizations acting as intermediaries between the municipalities
and the private stakeholders is still not clearly defined despite a wide range of experiences
regarding public– private cooperation.
Before the financial crisis that erupted in 2008, private investor interest in urban renewal
programmes in Budapest soared. Most of the projects financed outright by real estate
developers were limited to new construction or to thorough renovation of buildings of
“specific interest” (e.g. prestigious buildings, former industrial buildings where fashion-
able developments such as loft dwellings can take place). International companies have
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carried out most of Budapest’s large real estate developments, either entirely or in collab-
oration with local firms. Some important Hungarian investors have also been engaged in
urban renewal programmes, such as the Futureal Real Estate Development, Ltd. in the
VIIIth district. The majority of construction firms are small- or medium-sized Hungarian
enterprises, usually the successors of former large state construction companies.
As in other Eastern European cities, urban renewal in Budapest has been mainly limited
to physical rehabilitation or reconstruction. In addition, urban renewal in Budapest gives
evidence of a one-sided focus on new construction—either on empty lots in the historical
centre or in abandoned brownfield sites. New construction has often been preceded by
demolition and without the existence of previously elaborated strategies concerning
overall area development. Since 2000, several new strategic documents have been
adopted that indicate the growing concern of local authorities over urban renewal
issues. In these documents, urban renewal appears as one of the main challenges of
urban, economic and social development of Budapest and a main component in enhancing
the city’s regional and European competitiveness. Nevertheless, these principles have not
been translated into concrete measures based on coordination approaches undertaken by
the various districts with the central municipality. As discussed in greater detail below,
there are first indications that changes are taking place at the district level and within
the scope of individual projects.
The case of the IXth district (Ferencva
´ros) has often been evoked as the major, if not
unique reference for Budapest’s post-1989 urban renewal experiences (Fayman et al.,
2008). This was, in fact, the only project initiated in the early 1990s—at a time when
all dwellings in the area concerned were still in public ownership. Because of this, the dis-
trict government could develop—and later sell—these buildings in the framework of its
pioneering experiment in public – private co-operation. This project in fact attracted a
large number of private investments and achieved the (desired!) gentrification of the
area. As a result, the character of the renewal area was completely transformed with
former local inhabitants displaced to other parts of the inner-city. Subsequent urban
renewal projects have varied in terms of their aims and methods. What is notable is
their frequent focus on physical renewal rather than issues of social sustainability.
Among the more prominent projects are the following:
.Major conversions of old industrial sites in the largely working class XIIIth district
to new, high-standard condominiums. These are, more than anything else, large scale
real estate investments that are actively contributing to the upgrading of the entire
district.
.Demolition and new construction in the VIth and VIIth districts: many of these projects
have been realized in a piecemeal and anarchic fashion, reflecting high levels of local
corruption in condominium development within historical neighbourhoods next to the
city centre.
.Upgrading of public spaces (squares and streets): this has taken place in different areas
of the city as a form of urban renewal that contributes to regeneration by increasing
neighbourhood attractiveness.
.Newer projects where attempts at comprehensive regeneration within inner city districts
have been underway. In many respects, these projects follow precepts of integrated
renewal of urban areas as practised in many Northern and Western European cities.
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These projects are located in the VIIIth, IXth and Xth districts and are discussed in
greater detail below.
From Renewal to Regeneration: Examples from Budapest Neighbourhoods
As powerful and expedient an instrument they might be for Budapest’s cash-strapped local
governments, the disadvantages of public – private models of urban renewal have elicited a
demand for new strategic approaches to managing PPPs. Controversies over PPPs have
been exacerbated by the excesses of speculative demolition and new construction in his-
torical neighbourhoods. In many cases, renewal has been tantamount to eviction and relo-
cation of original residents, resulting in a large-scale exchange of population—and not
merely gentrification.
Civil society organizations made up of architects, artists, environmentalists, local resi-
dents and others have been active in advocating a new politics of urban development. The
group OVAS! (or “veto!” in English) has championed protection of the old Jewish quarter
in the VIIth district which has been subject to a particularly onerous form of speculative
“renewal” based on the demolition of historical buildings without prior public discussion.
OVAS has obtained professional assistance from UNESCO in order to block further demo-
lition of the neighbourhood’s historical buildings; in 2004 the Jewish Quarter was tempor-
arily designated an architectural heritage area.
Vocal resistance to the permissive practices of inner city renewal has underscored the
increasing political nature of urban development polices in Budapest. This is evidenced
as well by the increasing activities of various organized groups (stakeholders) who seek
greater voice. Condominiums and housing cooperatives have their own association,
such as the Professional Association of Housing Cooperatives and Condominiums
(LETESZ). The Association of Tenants and Residents (LABE) aims at defending the inter-
ests of tenants and owners. In recent years, more and more associations appear interested
in preserving cultural, architectural and social values. Some of them have applied for inter-
national support. While “grassroots” concerns are articulated largely though professional
and civil society organizations such as these, their capacities for effective political action,
for example vis a
`vis local government managers and economic interests, are still quite
limited.
Coinciding with the greater visibility of civil society in the politics of urban develop-
ment, “social urban renewal” (the official term used in Hungary) has emerged as an
urban policy concept, particularly since the mid-term development strategy of Budapest,
the Podmaniczky programme adopted in 2005. Preparation for EU membership and the
changing conditions within which public policy in Hungary have been framed have con-
tributed to the gradual formulation of holistic urban regeneration principles. Contrary to
traditional urban renewal practices that have been generally limited to the physical revi-
talization of urban areas, Budapest’s attempts at social urban renewal (and, hence, regen-
eration in the sense of more global discussion) are targeted at the integration of deprived
neighbourhoods through diverse social, economic and cultural programmes. Apart from
urban social renewal, other types of programmes have been implemented, such as the reha-
bilitation of public spaces, squares and streets together with the establishment of new cul-
tural and tourism functions as a means to “upgrade” neighbourhoods. Since 2007 and in
light of the present EU structural funds phase (2007 – 2013) social urban renewal has
been recognized as a major issue in urban development projects. All districts as well as
Urban Regeneration in the Post-Socialist Context 13
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the City of Budapest itself are required to prepare integrated urban development strategies
in order to obtain resources in the framework of the Regional Operative Programmes. As
part of this approach, the gradual improvement of the physical environment is also to be
achieved with the involvement and participations of local inhabitants.
Elements of a new urban social agenda have been evidenced by recent projects under-
taken in inner city neighbourhoods. One large-scale project where this is being attempted
is the “Corvin Promenade Project” a vast area in the VIIIth district that has been cleared in
order to make way for a new multifunctional urban quarter. In addition, three deprived
neighbourhoods were designated as pilot project areas. Two of these projects, the
“Bihari Street” (Xth district) and in the so-called “Magdolna Quarter” (VIIIth district)
have subsequently been developed as part of a more long-term regeneration strategy. In
the third area, the “Dzsumbuj”, located in a peripheral area of the IXth district, demolition
rather than the rehabilitation of existing housing was chosen due to the degree of depri-
vation and social stigmatization associated with the area (Fayman et al., 2008). This
last example has been heavily criticized for its heavy-handed treatment of the residents,
largely Roma families. The EU-funded RESPECT project (2010) was able to determine
that a large number of the evicted and subsequently relocated families were very dissatis-
fied with the process.
The VIIIth district of Budapest (known as Jo
´zsefva
´ros) is located in its South-Eastern
part, in the intermediate area between the city centre and the peripheries. It surface
covers 685 ha. Its origins date back to the eighteenth century, while most of the
housing stock was constructed in the second part of the nineteenth century. In its inner
part, inside the Grand Boulevard (a major ring road within the central city), a number
of national and municipal-level institutions were built, together with palaces of the aristoc-
racy. Outside the Grand Boulevard, Jo
´zsefva
´ros was traditionally the area of workers,
owners of small industries and retail. Further from the centre, area-consuming functions
and relatively higher-status residential enclaves were located. Its population reached its
peak between the two world wars, with 100,000 inhabitants. By that time, Jo
´zsefva
´ros,
especially the centre part became one of the most congested and least prestigious parts
of the capital. After WWII, the area became subject to physical and social decay, due
to artificially low rents, poor maintenance, lack of renewal, the ageing of the population
as well as the arrival of low-status and partly Roma families in the 1960s and 1970s. In
the 1970s policies aiming at urban reconstruction resulted in the demolition of part of
the housing stock of middle Jo
´zsefva
´ros and the construction of a housing estate, which
proved to be an unsuccessful attempt to stop negative processes. The so-called Szigony
housing estate became a socially problematic area of the district, while (never fulfilled)
plans to extend the geographical scope of renewal prevented other parts of the housing
stock from being renewed.
Urban development understood in terms of comprehensive regeneration has been on the
political agenda in the district since 1996. For the purposes of managing processes of neigh-
bourhood regeneration, the local municipality created a specific company, RE
´V 8, in 1997 as
a quasi non-governmental organization. RE
´V 8 is 61% owned by the district municipality of
the VIIIth district and 39% by the municipality of Budapest. Its mission is to elaborate pro-
posals for urban development and renewal strategies and to manage projects. The company
is an operator – mediator that plays a variety of roles according to the respective projects in
which they are involved. It acts as a mediator between the municipality and the investor in
one of the ongoing projects (Corvin Se
´ta
´ny or “Corvin Promenade”), and as a direct operator
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in the other (Magdolna Quarter). In the beginning the company consisted of one director and
one employee. A decade later it has over 25 employees. A few of them are employed on a
project basis, others work in thematic areas as specific experts or social workers. RE
´V8is
financed on a project basis by the district municipality. RE
´V 8 was also active in the renewal
of the most prestigious part of the district (inner Jo
´zsefva
´ros). Once the area’s increased
attractiveness became perceptible to private investors, the company’s attention turned to
more deprived areas of the district (Figures 2– 5).
Corvin Promenade Project (Corvin Se
´ta
´ny)—Demolition, Relocation
The area is situated next to the IXth district, at the intersection of the inner and central parts
of the VIIIth district. The idea to transform the blighted and socially stigmatized neigh-
bourhood emerged for the first time during the 1980s. RE
´V 8 began to work on the
project in the 1990s, but it was only much later that the project actually began to materi-
alize. The project “Corvin Promenade” was officially launched in 2004 when the present
developer Futureal Ltd. purchased the ownership of the former members of the consortium
Corvin Plc. It took 1 year for the new company to review the strategy of the programme.
They requested the assistance of various experts from Hungary and abroad: architects,
urban developers, specialists in tourism and communication as well as real estate
experts. Work began in 2006 and is expected to last until 2012. With this massive
project of urban redevelopment, the district municipality hopes to create a “city within
Figure 2. Large scale demolition and new construction characterizes the Corvin Se
´tany project.
(Photograph by W. James Scott).
Urban Regeneration in the Post-Socialist Context 15
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the city”, a centre for commercial and office activity, entertainment and culture, living and
tourism. The operation was subsequently divided into separate plots, all of them being the
subject of an independent project undertaken by companies that were selected through
tenders. The selected enterprises included large Austrian enterprises as well as a
number of Hungarian construction firms. Marketing and selling of the new dwellings
had already begun in the planning phase and a majority of the units were sold before com-
pletion. A part of the Atrium (in the commercial block of the project) was sold, for
example, to a French investor. Real-estate prices have already tripled in the area.
The private sector plays a central role in the Corvin project. This fact highlights the
weakness of legal and technical instruments that would be necessary to promote as
social agenda within comprehensive urban development objectives undertaken predomi-
nantly through private investment. In order to assemble the land required for the
project, 1100 housing units were demolished, displacing several thousand persons. Demo-
lition in the project area was the responsibility of the local government and plots were sold
to the developer following demolition. The Hungarian firm Futureal Ltd was in charge of
the preparation of the plots (provision of utilities) and the programming of the develop-
ment of local services (schools and health care) according to the number of dwellings
to be constructed. The municipality required the developer to hire unemployed people
and to contract with local SMEs for demolition works and the reconstruction of roads.
The company was also in charge of the development and maintenance of public spaces.
RE
´V 8, responsible for the “social management” of Corvin Promenade, directed displaced
families and individuals to new housing or offered cash compensation for those seeking to
Figure 3. Homes with Heart and Soul: international marketing of new luxury condominiums and
rental flats in the Corvin Se
´ta
´ny redevelopment area. (Photograph: James W. Scott).
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purchase a new dwelling. With its relocation strategy, the district municipality of Jozsef-
va
´ros sought a socially acceptable compromise, locating new dwellings in nearby areas.
However, critical observers argue that many of the original area’s social problems have
been merely shifted.
3
This has left the most vulnerable groups at a distinct disadvantage;
the “ghetto syndrome” that Corvin sought to address has not been reduced, instead, ghet-
toization continues apace within ever smaller geographical spaces. In the most extreme
and, sadly, rather frequent cases, poorer families out-migrate to villages where they
have roots, forming rural “ghettos” largely isolated from urban society.
4
In the VIIIth dis-
trict, relocation has been monitored by REV 8 based on tools such as interviews on the
needs of the former inhabitants. Nevertheless, these actions have concerned only the
process of relocation and have not provided feedback on the development of new living
conditions.
The Dzsumbuj Project
The social impact of renewal in Ferencva
´ros (the IXth district)—namely the large number
of low status households being forced out of physically and socially deprived areas—is
often cited by urban experts as clearly negative example of urban redevelopment in Buda-
pest.
5
Representatives of RE
´V 8 point out that in the case of the “Dzsumbuj” project, poor
people, and especially Roma, have been relocated with practically no regard to their future
living conditions. This situation contrasts with the Corvin project, where at least some
Figure 4. Social and physical regeneration: the heart of the Magdolna redevelopment area
where rehabilitation of pre-WWI structures and the participation of local residents is envisaged.
(Photograph: James W. Scott).
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former residents have been relocated in the vicinities of their former neighbourhood but in
better quality dwellings. There have also been no follow-up studies conducted by the dis-
trict that monitor the situation of relocated families. Relocation has been particularly
insensitive to large families and elderly persons who have been especially difficult to inte-
grate into new neighbourhood contexts. Assistance in the form of legal aid and counselling
to displaced persons from the Dszumbuj has come from civil society organizations (such
as FECSKE—the Ferenceva
´ros Family Aid Centre) and social workers. As the RESPECT
project relates (2010), the district municipality has been accused of ethnic discrimination
and the marginalization of Roma families in particular.
The Magdolna Quarter Project
The Magdolna quarter is a particularly deprived neighbourhood in Jozsefva
´ros (the VIIIth
district) to the North of the Corvin project area. The area has a population of just over
13,000 (15% of the entire population of the VIII district) but receives 47% of all social
subsidies targeted at Jozsefva
´ros. Between 20% and 30% of the population are Roma,
an ethnic minority that suffers considerable social exclusion both in Budapest and in
Hungary as a whole. The housing stock dates from before WWI and is generally
in poor condition; more than 40% of 5564 housing units remain in district ownership.
In terms of the implementation of social regeneration in Magdolna, RE
´V8 is active here
as well, it acts as a mediator between local residents and the district as well as manages
the overall project. The Magdolna quarter is one of the three areas that had been designated
Figure 5. Improvement of the urban environment: A new community park within the Magdolna
Quarter, shortly before its opening to the public in Spring 2008. (Photograph: James W. Scott).
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in the beginning of the 2000s as pilot projects of social urban renewal in Budapest. Further
inspiration for the project has come from Birmingham’s urban renewal programme and the
“Soziale Stadt” programme in Germany in which integrated neighbourhood improvements
are key elements (see Senatsverwaltung fu
¨r Stadtentwicklung, 2010). The first phase of the
Magdolna Quarter project took place between 2005 and 2008, the second was completed at
the end of 2010. In the first phase the project budget totalled 3.3 million euros, out of which
2.76 million were financed by the Municipality of Budapest and only 72,000 Euros from
different EU sources. In the second phase the project became a pilot programme for “inte-
grated social rehabilitation” within the framework of the Regional Operative Programme
of the Central Hungarian Region with a budget of 8.8 million euros, financed totally out of
European Structural Funds.
The regeneration of Magdolna consists of seven elements that give evidence of a holis-
tic approach: (1) rehabilitation of housing, (2) improvement of public spaces, (3) establish-
ment of a community centre, (4) improving schools and educational opportunities, (5)
prevention of juvenile delinquency, (6) development of employment opportunities and
economic activities and (7) the provision of local cultural, social and health services.
Besides physical improvement through new investment, the objective of Magdolna
Quarter is to empower the local population and integrate it into the social and economic
life of the district (and city as a whole). This is to be achieved through citizen participation
in a number of local projects as well as through the renewal of the housing stock with the
involvement of inhabitants. The second project phase foresees the establishment of a
project fund and neighbourhood councils along the lines of the German programme
“Socially Integrative City” and structures of neighbourhood management (Quartiersman-
agement) that have been developed in German cities such as Berlin (Senatsverwaltung fu
¨r
Stadtentwicklung, 2008) (Table 2).
In contrast to most renewal programmes in Budapest, Magdolna, as a pilot project of
urban regeneration, aims at keeping residents in the area rather than resettling them.
Table 2. The goals of the Magdolna quarter project
Magdolna regeneration: strategic social objectives—15 year time horizon
Objectives Measures
Securing affordable and decent housing for
everyone
Through the assurance of housing maintenance
support guarantee that 80% of residents will
live in affordable and healthy housing
Secure the modernization of all housing units that
are in local district ownership
Increase the social status of neighbourhood
residents; improve the employment
qualifications of residents
Double the number of residents with secondary
school diplomas and assure that all residents
above 40 years of age obtain basic education
Minimize segregation; eliminate poverty Employment programmes aimed at lowering the
number of persons living in poverty
Locating higher status residents within the area
Lowering area unemployment to district averages
Strengthen social cohesion Achieving a 25% participation rate of local
residents in neighbourhood strengthening
actions
Source: http://epiteszforum.hu/node/1111.
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However, as the first project of “social urban renewal” in Budapest it has not been able to
benefit from previous local experience in Hungary. Implementation of individual pro-
jects has been hampered by low levels of participation, and little attempt has been
made to involve civil society organizations. Overall project management suffers from
a lack of communicative skills and is not wholly accepted by local residents. Criticism
has also been levelled at the top-down approach of RE
´V 8 which as a municipally owned
Quango has not been able to perform its designated role as mediator. In fact, given the
lack of planning tools in Budapest it would be difficult to manage a complex programme
such as this under the best of circumstances. However, the success of Magdolna will
hinge upon public participation in neighbourhoods where inhabitants have never been
asked before to express their opinion and where mistrust of local government is rife.
More sophisticated methods are required for the future development of the project
(Kondor & Horva
´th, 2008).
To conclude, experimental approaches to urban regeneration are evidenced by the
Corvin and Magdolna projects in some of the most deprived neighbourhoods of Budapest.
In the former case, demolition of housing and the relocation of inhabitants have eliminated
a ghetto and improved the housing conditions of many of the former residents. However,
the successful integration of these relocated households into new surrounding remains to
be seen. Critics see Corvin as having merely shifted the phenomenon of exclusion to other
neighbourhoods. As such, questions regarding the quality of housing, living conditions and
coping with relocation and adapting to new environments need to be addressed. The Mag-
dolna project aims at the transformation of a neighbourhood by maintaining its physical
elements and its social mix, hence avoiding relocation and/or displacement of inhabitants.
It is an ambitious objective. Tangible results of the programme, now in its second phase
will require some time to materialize. Above and beyond the rehabilitation of deprived
Budapest neighbourhoods, the Magdolna and Dzumbuj projects offer critical reflection
on the treatment of the Roma population and a need for greater recognition of their
rights to the city (RESPECT, 2010). The process of social exclusion that Roma and
other minorities are subject to must be counteracted by a more serious attempt at intercul-
tural dialogue, at the neighbourhood level and nationally.
Regeneration and Urban Governance in Budapest: Concluding Remarks
This study of Budapest confirms that specific urban regeneration practices that emerge
locally do not easily fit pre-prescribed governance models or paths of institutional devel-
opment. This is of course now common knowledge—a general consensus that can be
ascertained from the research state of the art. What differentiates the experiences of the
post-socialist EU member states from the “rest” of Europe is the degree of institutional
fragmentation, not only in administrative and jurisdictional terms but also in terms of
policy frameworks. European Union membership and the complex process of qualifying
for EU structural fund assistance have forced a process of adaptation on Hungary in
which of normative rules and strategic objectives have been incorporated into national
planning and policy documents. The benefits of EU funding have also become visible
in the case of urban generation in Budapest; the Magdolna process of neighbourhood
engagement is largely supported by EU structural funds.
Yet, the question remains as to whether the Budapest experience of “learning by doing”
under what up to now can only be termed “laissez faire” urban renewal can set a precedent
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for new urban policies, both citywide and in Hungary as a whole. The past lack of attention
to the wider social impacts of urban renewal is perhaps symptomatic of a more general
political insensitivity to local issues and local sensibilities. The social dimension has
been slow to arrive in post-socialist countries (see Murzyn, 2006; Smith & Rochovska
´,
2007). In the case of Budapest, gentrification and the exchange of local population have
been the principle objectives of most urban renewal projects (Csana
´di et al., 2010).
This has been visible in terms of demolition, new construction as well as in terms of
increasing numbers of homeless and disenfranchized persons. Urban crisis in Budapest
and other post-socialist cities is now conspicuous and the limitations of top-down,
market oriented forms of governance are being challenged. While the changes
taking place are incremental (and the Corvin and Magdolna give some evidence of this,
despite their management shortcomings) they might signal institutional changes that
could in future support integrated and holistic approaches to regenerating
Budapest’s inner city. In addition, civil society organizations have become more vocal
and better organized, and their ability to articulate local concerns and to turn local resist-
ance against speculation and social exclusion into broader political issues has gradually
improved.
For this reason, we will conclude this discussion on a somewhat idealistic note. Tarrow
(1994) has argued that phases of heightened contestation of political agendas and the roles
of elites in the setting of those agendas can provide incentives for collective action 2pol-
itical opportunity structures 2that can result in reform or in wholesale systemic change
(revolution). Tarrow’s definition focuses more directly on the opening of action spaces for
social movements as a result of crises of political legitimacy. However, we argue that in
the context of post-socialist transformation, this concept can also be employed to signify
changes in the response mechanisms of government as a result of increasing social imbal-
ances and external pressure to adopt more democratic forms of governance. For this
reason, we also argue that political opportunity structures could be emerging in
Hungary (and Budapest) in line with the now quite visible limits to the benefits of neo-
liberal economic transformation policies. Shifts in political discourses, policy orientations
and public sensitivities are taking place that could open spaces for the re-negotiation of
urban development practices.
Notes
1. The post-socialist states that make up the 27-member European Union are: Bulgaria, Estonia, Czech
Republic, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, Slovenia. East Germany was reunified
with the Federal Republic of Germany in October 1990.
2. Reference is made to the theoretical discussion pioneered by Lauria (1997), Stoker (1995) and others.
3. As reported by Zsuzsanna Wirth in the 20 May 2008 edition of the internet newspaper Origo (“Veszik a
co
´kmo
´kjukat a Corvin-se
´ta
´ny o
´
´slako
´i”), www.origo.hu/itthon/20080519.
4. As Hungarian sociologist Ja
´nos Lada
´nyi states in an 2008 interview with Origo reporter Zsuzsanna Wirth
(see note 3).
5. Based on interviews carried out by Krisztina Kereszte
´ly between 2006 and 2008.
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